State of Oklahoma

FORM
Small Business Capital Company
Report for Investors
527-A 0
0
7
A copy of this form must be enclosed with the investor’s income tax return if the credit is claimed.
This form must be furnished to the investor by January 31st. See instructions for further information.

Identification Number Identification Number

Name of Investor Name of Small Business Capital Company

Address

City State Zip Address

City State Zip

Part I Establishing the Small Business Capital Credit
(1) (2) (3) (4)
Date Total Investment in,
of or in conjunction with, the Total Credit Available Credit Allowable
Investment Small Business Capital Company (Column 2 x 20%) in 2007

Total credit allowable in 2007

Carry the credit claimed this year to Form 511CR. If the entire credit is not being claimed this year, complete Part II for the subsequent carryover years.
Under penalties of perjury, I declare that I have examined this return, including accompanying statements, and to the best of my knowledge and belief it
is true, accurate and complete.
Officer, General Partner or Member Date

Part II 2007 Credit Carryover

1. Total credit allowable in 2007................................................................................ 1.

2. Credits used in prior years:

Year Amount

(a) 2007 $

(b) 2008 $

(c) 2009 $

Total credits used prior to this year........................................................... 2.

3. Unused credit available (line 1 less line 2)............................................................ 3.
4. Credit claimed this year, _____ (carry to Form 511CR)....................................... 4.
5. Unused balance carryover (line 3 less line 4) (three year carryover limit)............. 5.
Form 527-A
Instructions and Guidelines for Preparing
Small Business Capital Company Report for Investors
Title 68 O.S. Section 2357.60-2357.65 and Rule 710:50-15-86

Part 1 – Establishing the Credit

Column 1:
List the date(s) the investor invested in, or in conjunction with, the Small Business Capital Company.

Column 2:
List the total amount(s) invested in, or in conjunction with, the Small Business Capital Company. Any funds invested in an
Oklahoma Small Business Venture shall be subject to the following requirements:

1. The Oklahoma Small Business Venture must issue its equity securities or subordinated debt instruments in
exchange for a qualified investment within 30 days of the date as of which the investment occurs;

2. The qualified Small Business Capital Company or any entity making an investment in conjunction with investment
by a qualified Small Business Capital Company must reflect the documented qualified investment in the
Oklahoma Small Business Venture as an asset in its accounting system;

3. The qualified Small Business Capital Company shall not make a qualified investment in an Oklahoma Small
Business Venture in which it has, at any time, more than 50% ownership, whether directly or indirectly, of the
voting interest entitled to elect the governing board of any Oklahoma Small Business Venture in which a qualified
investment is to be made by the qualified Small Business Capital Company; and

4. Neither the qualified Small Business Capital Company nor the Oklahoma Small Business Venture can enter into
any agreement, whether formal or informal, written or unwritten, the purpose of which is to control, directly or
indirectly, the return of a specific amount of qualified investment by the Oklahoma Small Business Venture to the
qualified Small Business Capital Company or the purpose of which is to cause or require the transfer of such
specific amount of qualified investment to any other entity within five years of the date the qualified investment is
made available to the Oklahoma Small Business Venture.

Column 3:
Compute the total Credit available. Multiply the figure in column 2 by 20%.

Note: If a pass-through entity is entitled to the credit, the pass-through entity shall allocate such credit to one or more
of the shareholders, partners or members of the pass-through entity, provided the total of all credits allocated shall not
exceed the amount of the credit to which the pass-through entity is entitled. The credit may only be claimed for funds
borrowed by the pass-through entity to make a qualified investment if a shareholder, partner or member to whom
the credit is allocated has a legal obligation to repay the borrowed funds but the allocation may not exceed such
shareholder’s, partner’s or member’s pro-rata equity share of the pass-through entity even if the taxpayer’s legal
obligation to repay the borrowed funds is in excess of such amount.

Column 4:
List the amount of such credit eligible to be claimed this year. The credit for investments made in a Small Business Capi-
tal Company may only be claimed for a taxable year during which such company invests funds in an Oklahoma Small
Business Venture and the credit shall be allowed only for the amount of the funds invested in such venture. The credit
for investments made in conjunction with the Small Business Capital Company may be claimed in the year in which such
investments were made.

Note: If a pass-through entity is entitled to the credit, the pass-through entity shall provide to each partner, shareholder or
member, documentation showing their share of the “total credit allowable in 2007”. Such documentation must be provided
with the partner’s, shareholder’s or member’s income tax return when their share of the credit is being claimed.

Credits

There shall be allowed a credit equal to 20% of a qualified investment in a qualified Small Business Capital Company
which is subsequently invested in an Oklahoma Small Business Venture. The credit may only be claimed in the tax year
in which the Small Business Capital Company makes the qualified investment in an Oklahoma Small Business Venture if
Form 527-A
Instructions and Guidelines for Preparing
Small Business Capital Company Report for Investors
Title 68 O.S. Section 2357.60-2357.65 and Rule 710:50-15-86

Credits (continued)
the funds are used in pursuit of a legitimate business purpose of the Oklahoma Small Business Venture consistent with
its organizational instrument, bylaws or other agreement responsible for the governance of the Small Business Venture.
If the tax credit exceeds the amount of tax liability, the amount of unused credit may be carried forward for a period not to
exceed three years.

There shall also be allowed a credit equal to 20% of the investment in Oklahoma Small Business Ventures in conjunction
with qualified investment in such ventures made by a qualified Small Business Capital Company. To qualify for the credit,
a qualified investment shall be:

1. Made by a shareholder or partner of a qualified Small Business Capital Company that has made a qualified in-
vestment in an Oklahoma small business venture;

2. Invested in the purchase of equity or near-equity in an Oklahoma small business venture;

3. Made under the same terms and conditions as the qualified investment made by the qualified small business
capital company; and

4. Limited to the lesser of:

a. 200% of any qualified investment by the taxpayer in the qualified small business capital company, or
b. 200% of any qualified investment made by the qualified small business capital company in the Oklahoma
small business venture.

If the tax credit exceeds the amount of tax liability, the amount of unused credit may be carried forward for a
period not to exceed three years.

The credit shall be allowed against income tax imposed by Section 2355 or the bank “in lieu” tax imposed by Section
2370.

No credit will be allowed for qualified investments made prior to January 1, 1998 nor for the same qualified investment for
which a Rural Small Business Capital Credit is claimed under Section 2357.73 or 2357.74.

Recapture

The Oklahoma Tax Commission is authorized to recapture the credit if it finds that the transaction does not meet the
requirements of the Small Business Capital Formation Incentive Act.

Reporting Requirement

The Small Business Capital Company must furnish this form to the investor by January 31st of the year following when
the investment becomes eligible for the credit. A copy must be enclosed with the investor’s income tax return if the credit
is claimed. If the investor is a partnership, S-Corporation or other pass-through entity, such entity must provide to each
partner, shareholder or member, documentation showing their share of the “total credit allowed in 2007”. Such documen-
tation must be provided with the partner’s, shareholder’s or member’s income tax return when their share of the credit is
being claimed.

Part 2 – 2007 Credit Carryover

The credit not used may be carried over, in order, to each of the three years following the year in which the credit was
eligible to be claimed. Complete Part 2 to compute the amount of the 2007 credit carryover to be used in each of the next
three subsequent years. Keep a copy of this form to file with your return for each such year in which the 2007 credit car-
ryover is claimed.